How to retire with millions (and pay $0 taxes)

I've now met so many regular people with 8 and 9-figure Roth IRAs on which you won't owe any taxes at all. And a lot of them have done that with vanilla investing.

I think that we're going to do basically like first half of this is like money tips, meaning like, you know, sort of like personal finance stuff that nobody really teaches you. You know, because we get most of our personal finance information either from two really bad sources, either your parents who probably only knew so much. And like when you're a little kid, you think your dad knows everything. But then when you grow up, you're like, oh, he's just a guy. And like, you know, he did the best he could with what he had. And the other thing is like, you know, TV or books or salespeople who was like, their incentive is very different than yours, right? Like one of my favorite YouTube videos is like about— it has a picture of Jim Cramer and it says, will this Will this very loud man make me money? And it's like, no, he will not. The blinking lights on this guy's screen and that this money guy on TV is not the guy to listen to. So we'll do that. And then you had a bunch of business ideas also, like that you've been brainstorming your cheat sheet of startup ideas. So we'll go to that after.

But Sean, do you, do you guys know each other well, by the way? I don't even know.

We've never hung out in person.

We've never hung out. We've exchanged. We've tried to hang out. Haven't hung out. The last episode was the closest we've gotten.

I like you every time we talk.

Yeah. So let me introduce you, Ankur. Ankur, this is my friend Sean. I've known Ankur since 2012 or 2013, and we've been buddies since. And I've known Sean since 2013, 2014.

I think I'm one of the only people at this point that's met Sam through the internet who's had beers with him. That's how, that's how far back we go.

It was a long way. It was a long time ago.

So give his, uh, give his background, his bio.

Uh, so when I met Ankur, he was, uh, doing a Facebook app that went viral and he made his first couple million dollars at the age of like 26 or 27.

No, bro, 20.

What was the app?

All the silly stuff. Personality quizzes, friend quizzes, how, like, answer 7 questions and you find out how good a kisser you are. Crazy stuff like that.

Then he started a company called Teachable. He was early on the course game.

He's—

he didn't quite bootstrap that company, but he owned the majority of it and sold it for something like $150 million, which I'm sure you're going to correct me if I was too low. And then now you have a new company called Carry. Was I too low?

It's $250 million, but close enough.

Oh no, that's not even it.

It's all, it's all a rounding error at that point.

But you made like $100 million when you were what, 32 years old?

Yep.

I mean, that's insane, right?

Did it feel more insane to make $1 million on a silly Facebook app like How Good of a Kisser Are You? Or was it more insane to make $100 million on this company that you, you know, this education company?

Zero to something is always more life-changing, undoubtedly, right? Like that was also the time where I just moved to America. I was an international student. I didn't really have, I was so new to everything, but like making money in college allowed me to like not go to class and like realize that if I can do things on the internet, like why, why ever get a regular job?

How much money did you have in your bank account before you sold Teachable?

Like 1.5 to like, basically I was flat. I didn't really spend money or grow money during that entire sort of time. Paid myself eventually a salary of $150 grand, which in New York was like roughly my life breakeven.

So then when you got your exit, you just moved the decimal points like 2 points, right? Yeah, basically.

I mean, we made like a little bit over $40 million in cash. The rest is equity, but the equity is pretty nice. It's just this random thing that, you know, keeps paying you out.

I love that you're open with money. I'm almost out of questions. What else can we ask this guy? He's divulging everything. This is amazing. Well, you sent us this list of topics and you said, when I sold my company, I ran an A/B test with the money I made. I gave half to Goldman Sachs to invest and I invested the other half yourself, I assume. Can you just talk about this?

What—

why did you do this and what was the result?

So like a lot of founders that first sell a business, most of us know nothing about money. I don't know, Sam, if you knew much or whatever. And I— you get hit up by every single one of the private wealth people. They're always in your emails. And, you know, you read the big, big brand Goldman Sachs, Morgan Stanley. So I talked to them. I couldn't fully tell how legit they were, and I had enough money where I'm like, you know what, let me take a sizable chunk. Let me give them that amount of money and see what they do. The other half, let me try and learn and figure stuff out myself. And went through sort of the standard startup, post-exit startup founder thing where you invest probably in too much. You don't say no enough. You go through a period where you think you're an investing genius. But it was cool to sort of see that develop over 5 years and now to have actual results.

And what were they?

What are the results?

The results are, in retrospect, there's nothing that special about private banking. There's a lot of clout that comes with it. But you look at the sort of portfolios they do, they're very vanilla and they charge you anywhere between 50 basis points to, you know, 120 basis points. The best part of my portfolio that they did was simply indexing the S&P. The S&P has returned about 13% in that time. They did a lot of other stupid shit that averaged it down to 6%.

What sort of stupid shit did they get you into? Was it like exotic, you know, is it random exotic things? Is it real estate? What are they putting you into? And were you saying yes or no on a case-by-case basis or they were making decisions?

So, so, so clear. They brought your average down to 6%.

They did. Yeah.

Dude, that's like the meme where there's like a guy like putting a stick in his own front spoke as he's riding his bicycle.

Yeah.

But again, the insane part is I genuinely think now that I know more about this, like you can't fully judge the performance based on like 5 great years. Like theoretically, that portfolio should protect your ass in down years of the market, right? We've also had an atypically good time, but the things that were rough with them is one, for a lot of products, they charged over 100 basis points to basically do what Vanguard funds could have done. They also put a lot of fixed income, which is bonds and stuff that it's a 31, 32-year-old with like infinite risk tolerance. It doesn't really make sense, right? So eventually I got them out of doing a lot of those things, but the whole process of kind of working with them, you realize all these people, their product has such insanely good margins that they can afford to do whatever. And they really sort of sell a lifestyle that now that I know more, it doesn't make sense for me, But for a lot of people who are new to the idea of having money, it's kind of a, you know, it's, it's a, it's a status thing as well, right?

Like, what did you— what were the— what are the perks of the status? I mean, you're a single guy. Surely you're not walking around with a t-shirt that says, I work with Goldman. Like, what, what, like, what's this?

Or what did you do?

It didn't— it didn't make sense for me. Like, for me, I never valued it that much. But yes, they have a, you know, a concierge team that can, you know, get you tickets to the US Open and like take you out for nice dinners whenever you want. I was the wrong target demographic because when they wanted to get dinner, I'm like, ah, fuck, it's another person to hang out with. But there's a lot of people who really enjoyed that side of it.

They're like, these tech guys are the best. They're introverts. They don't even take us on any of the free shit. We just get to charge them the fees. It's—

wait, so that's a really expensive, uh, US Open seat.

Correct. I mean, you do the math, right? And because you get charged a percentage of your assets, you never feel the pain but you're paying them 6 figures a year. If you had to cut them a check for $10,000 a month, you're like auditing that all the time. But that is what is so genius about this business model where you basically just keep running through this and over the course of your lifetime, you end up with many, many millions of dollars in fees. And it's not just the fees, those dollars would otherwise be invested. So whenever you run the math, you realize your ending portfolio is probably $10 million smaller. 20 or 30 years from now.

But what's the argument against this? Because they've been around for 100 years. They're huge. A lot of smart, rich people use it. Surely they're— I mean, what's the value?

I think the sweet spot, and in fact, I think our friend Ramit talks about this a lot, is I think financial advice is incredibly valuable. I think they serve a really good purpose. But at a certain point, the math on going flat fee is just substantially better for you, right? Like if you have $5 million, $50 million, $500 million, they don't do dramatically more things. Yet at every step you pay an order of magnitude more in fees. I think there's a lot of fantastic financial advisors. You pay them $5 grand a year, $10 grand a year, $20 grand a year. I don't care. You can easily get an ROI there, but it's the whatever, 1% of your wealth. That's the part that gets really silly. The better and better you do.

Alright, a few episodes ago I talked about something and I got thousands of messages asking me to go deeper and to explain, and that's what I'm about to do. So I told you guys how I use ChatGPT as a life coach or a thought partner, and what I did was I uploaded all types of amazing information. So I uploaded my personal finances, my net worth, my goals, different books that I like, issues going on in my personal life and businesses. I uploaded so much information. And so the output is that I have this GPT that I can ask questions that I'm having issues with in my life. Like, how should I respond to this email? What's the right decision knowing that you know my goals for the future? Things like that. And so I worked with HubSpot to put together a step-by-step process showing the audience, showing you the software that I used to make this, the information that I had ChatGPT ask me, all this stuff. So it's super easy for you to use and I Like I said, I use this like 10 or 20 times a day. It's literally changed my life. And so if you want that, it's free. There's a link below. Just click it, enter your email, and we will send you everything you need to know to set this up in just about 20 minutes. And I'll show you how I use it again, 10 to 20 times a day. Um, all right. So check it out. The link is below in the description. Back to the episode.

I want to ask you, uh, about indexing. So indexing is obviously super popular now. And you had some note on like simple other, other ways you can index that are, you know, maybe things that people should consider.

Yeah. So in general, like my overall thesis is most people, you're not going to get crazy differentiated performance from investing, but that's actually okay. It's kind of wild that an average person like, again, think about my example. I had all these financial, financial advisors. I had so much differentiated access. We know so many entrepreneurs, founders, whatever. The best part of my portfolio was indexing the S&P 500, and historically that happened a lot. So most people should not try and find alpha on the investment side. However, if you can be smart about saving money on taxes, that is where your alpha comes from. So one example, I think Sam and I talked about this on Twitter. I've started to do something called direct indexing, where instead of buying a Vanguard fund, it buys each and every one of the 500 companies individually. And the advantage with that is you have more positions, so more volatility. At any given point, more companies are down, so you harvest those losing positions. So net-net, you track the same as an index, but you'll get 30-40% of your investment as a usable tax loss.

Sam, do you do this, by the way?

No, because I think my— I'm not entirely well-versed on it, but I don't do it because what I'm doing is working, just indexing, and I sleep better at night. And number 2, from my understanding, Ankur, those, those gains eventually go, go, they go away.

So unless you're investing on an ongoing basis. So if you do a lump sum investment after 3 years, you'll harvest most of your losses. But if you're investing X amount per year, that kind of infinitely goes long.

But no, Sean, I don't do it. Do you?

Yeah, I do. So I, I invest in this company called Freck and they do this. So Ankur, have you seen Freck?

I, I'm actually, I'm actually a little bit nervous because I use them as well, but I don't want to be their biggest customer. I have a couple million holders on Kraken. I don't want to put like, I'm a little nervous about putting like 5 or 10 or whatever on them. I'm an investor too. But yes, I use, I use them.

The guy's really smart behind it. He sort of sat me down, explained it because I was like, look, don't assume I don't know anything because I read this and it sounds good, but it's kind of hand-wavy to me. Like, how does this actually work? So we, he explained it and I said, okay, cool. So I put $250K in as a test. So I'm basically doing the exact same thing I otherwise would have been doing.

Exactly.

Which is indexing the S&P. So I got the same performance as the S&P, but I, on my $250K, I added an extra $16,000 in tax loss harvesting, just holding the same exact asset as I would before. And so, and, you know, like you, I was like, wait, should I give this startup like millions of dollars? Or, you know, how do I want to do this? And like, you know, then he's like, well, we don't— you know, all fintech is basically built on top of other, like, providers, other pools, other, other pools of money. So, you know, it's not a startup that holds your money. It's like, you know, the custodian is usually somebody else. Same thing with Robinhood and others. Like, so anyways, I think it's kind of amazing.

Like an even simpler example, if direct indexing is too hard, is most people right now keep their cash in like a high-yield savings account or something. But if you are a high taxpayer, there's likely better places for it. There's either muni funds where you pay no federal taxes. There's Treasuries where you don't pay state and local taxes. There's muni funds specific to New York and California where you won't pay federal and state taxes. Like we built a very simple product that will just take your cash, calculate your tax rate, and find the best money market fund for you. That itself will take your tax equivalent yield from like 3-4% to like 6-7%.

When I hear you say all this, for most people, when they talk about this, I see a lot of people talk about this and I think to myself, You guys should just focus on earning more money. You should increase your revenue first, increase the revenue, and then worry about—

totally, totally. Like there's some percentage of people where they're like, oh, my business makes $50 grand a year. How do I save money on taxes? It's like, bro, you don't have a tax problem, right? You need to make more money.

Like I was at the— I was at a bike shop the other day and I was like, look at a bike. And there was a bike that was $2,500. And then there was a bike that was like $5 grand. And I was like, what's the difference? And they're like, like 2 pounds. So it's a lot. And then like this water bottle was made outta carbon and this, and I was like, well, I'm kind of chubby. So why don't I just lose weight? You know, like why don't I just like, I could like lose 5 pounds just by not eating for like, you know, a week. And I, and I, and I'll save myself that money and I'll be fitter. How about that? And that's kind of the same thing.

Absolutely. I think, I think for people like I, like I, I, it matters at our level when the compounding and stuff makes a big difference. But at like $30,000, $40,000, $50,000 in revenue, making more money is far more effective.

Well, I was going to say two things. One, this like, uh, direct, the direct, direct indexing. Um, I like these because these are set it and forget it. I made a decision. It took me 2 seconds to just roll. I literally push a button and it does an ACAT rollover of my S&P ETF holding, my Vanguard ETF holding from one brokerage to theirs. I never had to do anything. So it's like It was a 2-second change that has since yielded like, you know, $18K, $16K of extra, um, uh, tax losses that I harvested. Yeah, exactly. Like, so I don't have to do anything. I would never do that if it was like something I have to keep thinking about or keep doing something on a regular basis. Same thing what you're talking about with the buying muni bonds versus holding cash in a money market fund, right? If you're just gonna put cash in a place and be like, okay, it's earning like 3 or 4%, well, if you could just do the same thing with a muni bond and just not pay the state taxes, like, it's a, it's the same one decision, didn't take any extra time.

For the average person though, I would say for the person doing nothing, fuck it, do a Vanguard fund. That the most important thing is to do something. But for the people that already have an index fund, this is the sort of alpha.

What else is on the list of like, all right, you're wired tens of millions of dollars, you're worth 9 figures. I expected this to happen in terms of financial investments. Someone was going to present like this amazing deal to me. Someone was going to offer this amazing service. and it just was not what I thought, and everyone could have access to this.

For the first time, I felt like it didn't matter if I failed, even though arguably I needed the dollars more. Now it would feel so stupid to fail. I've been on panels telling other people how you should run your company, and you know, you have like this time everyone who joined the company did it because they're like, oh, you know, this guy will succeed again. So I feel like my pressure on myself, and it's fully my own construct, at the end of the day.

Can we switch away from emotions and you tell me about a mega backdoor Roth? I don't really care how you feel. I just really want to know about this Roth tax optimization.

What is this? So this has been, this has been kind of wild.

I want to know how Peter Thiel made $5 billion and didn't pay any tax on it. What was that?

Yeah. Talk dirty.

Tell me how you feel later. Talk dirty. Yeah.

Whisper softly. Tell me about my backdoor Roth.

But yeah, Peter, every— well, a lot of people read about Peter Thiel. What he did, which is like tax magic, is most people have access to a Roth IRA. He put his PayPal founder shares in a Roth IRA, sold those for about $27 million, then used this as a supercharged investment account to where it is today, where he has $5 billion in his Roth. He turns— he retires next year, so he gets all of that with no taxes.

But you got to dumb this down, man. What's a Roth IRA? Like, you got to like Talk down to me a little bit.

Yeah. So Roth IRA is an account that the government basically has gifted to taxpayers. There's a guy named William Roth who I think, you know, 15, 20 years ago or whatever, created this account ideally for the middle class. It was never meant to be for the richest people where you put in after-tax money, but then all further growth in that account is tax-free. Including no matter how high tax rates go in the future. Right. So if you look back in the 1970s, do you know what the top tax rate was in America?

It was like 20%.

It was like 80%. It was insane. Like the top marginal bracket was like 80 or super high. But the advantage of a Roth IRA is once you have dollars in, no matter how high taxes get, you pay nothing on what is in that account.

And what was the incentivization there for these people?

So the— it was a very short-term incentive at the time because the advantage is the government gets the tax revenue today because you're putting in after-tax dollars today. What you're giving away in the future is future revenue, but you're actually collecting more money upfront.

I'm saying, why would the government agree to this?

They want to incentivize retirement savings in general, and compared to traditional IRA, this brings this brings tax revenue forward. But it was always designed in a way that there was a maximum income. Once you make more than a certain amount, you were not supposed to have access. Today, those numbers are, I think, $150,000 or something. You're not— you don't really have access if you go the normal route, but that's where you have things called the backdoor Roth IRA.

Before you explain that, so basically it was if you make under a certain amount, You can put away some $7,000 or whatever a year, and you— so you've already paid tax on it, you put it there. Now it's going to compound tax-free. When you take it out after all those investments have compounded, you don't pay any taxes on that money because you, you sort of paid it up front.

What does that have to be, an age limit like 65?

You have to— yeah, you get your dollars at 59 and a half, but you can take out the dollars you contribute at any point for any reason. It's only the growth that is kind of locked up.

So what Peter Thiel did, which was great, was he put his PayPal shares in there when they were valued at nothing. So it was like—

exactly. So he bought his founder shares at like $0.0001 or whatever, and he probably knew, hey, this is a good chance that this thing can become valuable.

It's crazy, by the way, he only made $27 million on PayPal.

$27 million. Oh, at least from this Roth IRA. He put in $1,700 worth of founder shares and he made $27 or $28 million.

Okay, so then— and then he used that money to invest in Facebook within his Roth IRA. So then the Facebook gain is why it became billions of dollars.

Exactly. But you then read about Mitt Romney doing the same thing. But because I am in this line of work, I've now met so many regular people with 8 and 9-figure Roth IRAs, which is insane because you have, you know, $10 to $100 million on which you won't owe any taxes at all. And a lot of them have done that with somewhat vanilla investing.

Like, so tell me a story of someone who's done this with, so 8 or 9 figures. So you're saying $10 million or $100 million?

Yes, exactly. So Roth IRA limits are normally $7,000 a year. The challenge with that is it's tough to get a lot of money in. The whole game becomes how do I get a lot of money? And once you get $20 million, going from $20 to much more is actually easier. It's how do you get the first amount of dollars in? So in addition to the backdoor Roth IRA, there's something called the mega backdoor Roth IRA, which— the naming on this is not ideal, but—

What about the triple mega?

Triple mega, right? It's like the least creative names of all time. But the mega backdoor Roth IRA lets you use a 401 to get in $70,000 a year into this account. So you can combine the two, get in $77,000 a year. I actually sanity tested this. I built a very simple model that makes the assumption that you start contributing to your Roth IRA by 21, the mega backdoor by like 30. Even if you just index the S&P and you looked at the 100-year average of the S&P, you end up with $30 million in your Roth IRA at retirement. So it's, if you do this consistently enough, The tax benefit here is massive. Okay.

So who came up with this mega, mega backdoor?

Um, so the way people find loopholes is the IRS never intends for it to be this way. They write the law a certain way. Some smartass accountant is like, well, actually, if you do this, this, and this, we're still fully in compliance. The IRS challenges this, loses in court, and that's how we have loopholes. Like every single loophole comes the same way. The mega backdoor Roth, for instance, there's been legislation to outlaw it for the last few years. It comes up every time, but the existence of the fact that someone wants to make it illegal by default deems this as a valid loophole for now. So it's the sort of thing that like this gets negotiated down every single time, every single tax bill has it. Typically the Republicans fight against it and it just gets deferred and deferred and deferred. All right.

What are examples of people who have done this to $10 or $100 million?

So, I mean, address— what do you want them to say?

No, you could do a little Chatham House rules. You could kind of like anonymize them a little bit.

So I will tell you that these are people that you and I have never heard of. There's just a lot of like anonymous, wealthy, financially savvy people where it's a coalition of families and they have a family office that specializes in this sort of tax alpha as a service, but it's just a case of doing all the fundamentals together and then having very, very good investments. But I think if you can structure your 401 in a way that you can put in $70,000 a year into your Roth IRA, which I do now, honestly, just the sport of it is fun enough. And you do this over a long enough period of time, you have these results. It's the sort of thing that we don't know how long this loophole will exist, but for now it's like, you know, hundreds of millions of dollars with $0 in taxes is very good insurance from where tax rates may go in the future.

Let's— should we switch to business ideas, Sam?

Yeah, let's do it.

Cool. So Ankur, you sent us a list of ideas that you think any founder could go build, or you think that some founders should go build in this space. And you've started multiple successful companies now, so maybe you have interesting taste and maybe you're looking where other people are not. Because when I saw this list of ideas, these were not the like same 5 AI, you know, assistant ideas that you hear from most people. So hit us with your favorite one and let's go. Let's go. Let's go in order.

Sweet. So I'll go in, I'll go in somewhat random order because I have a few different ones. But one of the things I think about a lot is right now there's such a focus on proactive health and wellness. I don't know, New York City, for instance, people are spending all their time not in bars and clubs, but at, you know, saunas and cold plunges or whatever. And you have all these high-end executive services for like concierge health, basically, you know, Superpower, Function Health.

Function Health. I don't— you guys have to explain this. So basically what they do is you do a blood test and they tell you all about your body and everything. But this has existed for decades. I've been using it. I started using these years and years and years ago. This company, Function Health, has skyrocketed. And I think in the course of like 2 or 3 years, it got to $100 million in revenue. I believe they've just raised another round of funding in the billions. I have no idea why this category is booming like it is because it doesn't— I didn't know this. I don't know how this makes it any different from the decades of other companies doing this before.

And it's commoditized. Everyone uses the same blood testing companies. It's, it's— but I'm telling you, we're just moving to a world of proactive wellness. Like, I think everyone has realized, like, the medical system in the US is you kind of sit back and wait for really bad things to happen. And people of our generation have realized that you want to be proactive about this and not just not just kind of chill?

Yeah, I think, I think there's a bunch of factors, right? Like there's, there's the Bryan Johnsons of the world. So now you have these really big attention-getting influencers who are bringing attention to, you know, your health and wellness and making you realize like how much of a knowledge gap there is, how much of, how much more you could be doing. You might have thought you were already doing enough and then somebody shows you that there's a new level to enough, right? So you have the, the influencer side underneath. You have all the infrastructure. So you have lab testing in all these different places. So you can go get your blood drawn. You know, when I went on Superpower, it's like, cool, go, you know, do you want some— a nurse to come to your house or do you want to go 0.8 miles away? And there's 3 locations near you. And I was like, wow, this is like amazingly convenient. Then the next piece is that I think the HIPAA laws changed or the medical records stuff changed. So I just gave them my ID and they pulled all my health records. I never even had that myself. Like, they have my health records now in a beautiful website. They pulled all my medical history, which, like, I could— if I wanted to go look at my own medical history, I couldn't have even done that before. So, like, that, that was a change that happened. So you have all these different things sort of stacking on top of each other that, like Ankur said, like a cultural movement towards status, status being associated with being healthy rather than being a degenerate, right? Like, before, in my circles, the more you partied, the cooler you were, right? The more the more sort of bad for you your lifestyle was, the cooler you were. Now the more good for you the lifestyle you have, the better, the cooler you are. And I don't know if it's just I changed or culture changed.

Tell me, how were your results?

Oh, you didn't see my tweet about this?

Yeah.

What did you say?

I said, oh, I just found out that my chronological age, 37, is different than my biological age, 40. But long term, I'm not concerned because I'm just going to go ahead and kill myself now. Because you never see someone share their results where their age is worse than their actual age. It's always like, oh look, I have the body of a 23-year-old, you know, Russian gymnast. Uh, cool, thanks for— I'm so happy I used this app.

Why were you so—

I'm the only person— I'm the only person I've ever seen with a higher biological age.

I've never seen anyone.

I think I broke the record.

Yeah, what, what was so old about you?

Um, well, so it's pretty cool because actually the next thing that happens is they go there's a concierge doctor who basically is going to in a week give you kind of an action plan. So it's just, okay, look, we did these 30 tests in one and a single blood draw. They do these like 30 tests, right? And they say, look, right now, let's say, I don't know, let's just pretend it's like your whatever, your LDL is high or low, whatever, whatever, something is wrong. And then they'll basically start to talk to you. So there's a little concierge, a little chat here where somebody is going to then work with me to develop maybe an action plan, things I could be doing. Eating slightly differently, whatever, walking more steps, whatever, whatever you people do, go to cold plunge for 6 minutes, like all those things. And you come up with an action plan. So, you know, whether this is like life-changing or not, they're probably just gonna be like, yo, like delete DoorDash off your phone. Like, yeah, that'll probably do the trick. Like there's, you know, there's a few different ways that you can help somebody. But again, like this is not how normal medicine works. Normal medicine is a car, you know, mechanic. You go there when you're broken, they try to fix it. And most of the time they're like, yeah, it'll never really run the same, right? Like, we're in maintenance mode from here on out. Whereas at least this operates under the assumption of being proactive rather than reactive, and that there's actually something you could do. There's, there's actual lifestyle steps you could take and not simply like medicines you can get on to improve your health.

Yeah. I also think in addition to all of that, I do genuinely believe a lot of people are sicker than before. Particularly like in the US and some of my other ideas have to do with that. But I do think you look around, whether it's like fertility, gut health, allergies, like shit's kind of falling apart in a lot of places and people are reacting to that.

But by the way, the upsell in this thing is crazy because the, the initial deal is super good, right? So it's like $500 and you're going to have like a 10 times better version of your annual physical. It's like, okay, that's actually like a good trade that you don't need to be super wealthy to do. Like, you can pay $500 and get a better version of your physical. But when you're in there, it's like, you want to know how that gut's doing? Want a microbiome test? I'm like, ah, yeah, I'd love to. I kind of—

Dude, I had to click next the upsell page on Function Health. I did Function Health. I clicked next. I'm not joking, 15 times.

I didn't even click next. I clicked yes. I was like, yep, give me an allergy test. Give me a toxins test in my blood. Give me the gut test. I basically did every single test except for the, like, blood, like, cancer test one. And I just, I just said yes to all of them. So they upsold me like a couple thousand dollars worth of tests. But honestly, like, great. I wish my doctor had been offering me these. Like, why doesn't my doctor, like, offer me these? Either these two—

they do it, they do it the other way around. They're like, oh, you want to get your testosterone checked? You're like, fine. Yeah, yeah.

What's your wife say to you?

I'm like, what?

Why is this so personal?

So what's your idea here?

So a lot of these services are doing really well. I think you cut out the motivation a lot of times for people is the aesthetic side of it too. People want to look good. I think if you had a Function Health, but for your physical appearance, it would completely crush. So it's like you come in, it's like, wow, Sean, your hairline has receded 2 inches and you know, you get, you tie in a DEXA scan to it, but basically like a concierge service to elevate your experience. Like two of my college roommates are plastic surgeons, right? And I've heard a little bit about that side of the business, but marrying these two ideas, basically concierge lookups with improving your aesthetics, I think is a fantastic business.

This is actually a great idea.

We, we had Justin Mares on the podcast and his skin was glowing like it was.

Yeah, he's telling us about like his inner health and we were just like, he's handsome.

I was like, dude, your hair is full, your skin has a glow, your teeth look nice. Can you just tell me about that? And so, yeah, I'm on board.

We went out to breakfast, Sam, and he literally everything he ordered, I just said, whatever this man is, I need to eat. So he ordered this drink. I said— the waiter looked at me. I said, did you not understand the instructions? Whatever this man eats, I eat. And so I had an identical meal to him.

But, but I think you have to— like, Sam and I are investors in a testosterone company, and if the founder was not jacked, I would not have invested in the company. Like, I think— I think that's true.

Sean's in on that too, by the way. It seems like we've all invested in the same stuff.

Yeah. So you have to look the part in order to do it. So I think, yes, I think businesses focused around the aesthetic part of it would crush. I mean, you already have concierge medicine in Turkey, stuff like that. Secondly, I think anything that helps us break out of the US food system will, will do quite well. And again, probably more so in cities like New York. But it's kind of funny, like every Friday evening I go and meet my like raw milk dealer, which is super sketchy. It's this like Amish farm that like drives in. It's illegal. So, you know, they literally park on the side of the street. You make this little transaction. But I have a lot of people that just want to break out of the US food system. And I think businesses that enable people to do that will go quite, quite a long way.

And so how did you find this Amish farm? Like, what was your process to find this, this alternative?

So it was word of mouth. A lot of my friends were all talking about it. And then someone's like, oh, I get my beef from this place. And it actually started out with like you know, you buy beef and then you get upsold on all the other products. And now before you know it, my like soap is made out of goat milk and shit that's probably not even, not even relevant or helping. But, you know, they were, they were pretty, pretty nice business. But yeah, they go straight from farm to like they drive out to New York City. They have this little truck. They park the truck on the side of a street corner. You have a 30-minute window to meet them. And as much as I joke about it, it's actually pretty cool. It does improve the quality of my life. I do think the products taste well. Raw dairy is more of a novelty. You know, that's something that like, sure, I'll add $4 for the raw milk. But I think breaking out of the US food system, at least, you know, we'll see what RFK does. But in the short term, I think there are a lot of people that will pay quite a bit of money for.

Do you get all your meat from this Amish fellow?

I do. It's so good. Like, dude, I don't like chicken in America. Like, as someone that's traveled a lot, most chicken here at a grocery store tastes like nothing to me. Like you can't really taste anything. But here it actually, you know, again, such a big difference if you have the same stuff outside the US.

We all need one of these Amish guys.

Isn't this what a farmer's market is supposed to be, by the way?

It is, it is what a farmer's market is supposed to be. This feels more authentic, right? This feels, this feels more real.

Well, the way you describe it, it's more like a drug deal. And I actually, that kind of appeals to me in a way. Like farmer's market, it's a little bit like, oh, cute date on a Sunday morning, but like I kind of like an element of danger with my groceries.

This is contraband. This is contraband.

Exactly.

Not only that, when you like, you like buy something and all the signs on it will very clearly say not for human consumption, but it's like, wink wink, not for human consumption. Oh man, can we ground it up and inject it in my veins?

That's usually what I do when it says not for human consumption.

Yeah, for, for cats and dogs only.

Does it make you feel better, by the way, this stuff?

It does. I mean, of course you have to like control for placebo effect and stuff, but generally, yes, I do feel better when I'm, when I'm eating this and—

or don't control for placebo. Placebo is the best.

Placebo is a mess, right?

Yeah.

Yeah. Whenever I read about these, I'm like, wait, so you have to like study— like when we talk about placebo, we act like it's, like it's an issue. And I'm like, wait a minute, you're telling me I could take a fake thing and it gives me the real results? Give me all of the fake things. That's all I ever want is the fake thing.

No, it's— I mean, the only reason I even went down this rabbit hole is I remember I've had multiple times in my life where I'd like live a very healthy New York life, like cook my own food or whatever. And then I'd go to like Argentina for a month, live like a degenerate. And I'm like, I feel better. Like my physical body feels better. And I don't think it was the addition of the alcohol. I think it was just the food system.

It could have been that.

It could have been some of the other stuff you were doing on there too. Could have been different shit.

All right, give us the next idea.

All right, next idea is a travel agent, but for credit card points. Like, again, I have, I'm, we already talked about this, right? I'm on the cutting edge of a lot of personal finance shit. I still find it a pain in the ass sometimes to actually find the right flights. Like right now I have 250,000 Amex points, 100,000 Chase points. I'd pay a good amount of money for someone to go find me two first class tickets to someplace warm in the summer.

How, how do you, how do you want this to work?

I want this to be a concierge service. I want to tell people exactly what I have, like what are the points or whatever I have and where I'd like to go, including like, like, hey, like for a lot of times I don't even care where I want to go. It can be, you know, a warm destination in a certain part of the world. So they just do it for me.

Jack Smith is a friend of all of ours, I believe. Jack Smith, very— when he suggests something, you take it seriously, even though he's one of the strangest people ever. But there's like, you know, that he's like thoughtful enough that there's some unique reason why he uses this. He only books his flight via Flightfox.com. And I've used it a couple times, but basically you sign up and at the time I think it was free. Now it looks like it's $20 per ticket. You tell them like roughly when you wanna do something and there's a human on the other end who goes and books it for you and they spend like 2 hours per flight finding a flight for you.

Their business doesn't make sense. Like what's their margin on, in on this?

I have no idea, but I have booked 3 or 4 flights on this and it is amazing. It works every time. It just works.

Can you enter like your credit card points and stuff, or is this just dollars?

Yes. So you, they'll either just pay for it and book it for me, or they'll give me the exact flights to book. And then I go to delta.com and book it. Let me tell you another crazy thing. Have you guys ever heard, have you ever bought another, bought or sold another person's miles?

No, but that's the kind of stuff that like, I think businesses that made that easier, there's so much value to be unlocked there.

Have you ever heard of this, Sean?

I've heard about it. I've never done it before. Have you done it?

I've done it. So I booked a flight where I, I had a friend who spent roughly $10 or $15 million a year on advertising with his Amex card or some, some credit card. And he is like, I have all of these points. If you wired me the money, I will book the plane ticket for you and I will take a small fee. And you get the discount. And I did. And I think the flights, I think I saved 40% or 30%, something like pretty significant because I was buying like 6 first class flights. It was very expensive and it was like thousands of dollars that I saved.

So who's, who's this friend? Basically what they're doing, but as a true sort of professionalized service is how I would like it to work. And I think you can now automate a lot of the backend with—

but there's an issue. This is highly— not illegal, but it's against the terms and service of all these airlines. And so if you get caught doing it, I think they, they take your ticket.

I feel like a disproportionate number of my ideas are turning out to be illegal, but yeah.

Yes.

So what were you saying about the financial services company that you currently run? All right, let's, let's, let's Illegal raw milk.

I don't, I don't, I don't want my chief compliance officer to message me after this episode. I should add, nothing shared here should be construed as legal advice, investment advice, or tax advice. Everything is for informational and educational purposes only. Or health advice either.

Or health advice.

That's fine. That's not that regulated in this country.

But you're right on the points thing. So like I use, uh, like, uh, seats.arro, I think, which is basically you plug in what points you have and it's like a search engine, but it's like very slow. It's very hard. And I have to do it myself. You're absolutely right. Like, I want either a human or I need like AI to be able to do this where it just knows. I just say what I'm trying to do and sometimes it's as fuzzy as what you described. Like, I just want to go somewhere warm in the summer. Like, it's okay if it's Puerto Vallarta and it's okay if it's Hawaii, right? Like, I'm not as dead set on— and sometimes I am dead set on a date and a place. Sometimes I'm not, right? But either way, be able to make use of these points because I think I have 7 million Amex points.

7. Yeah, exactly. There's so much arbitrage.

Wait, you have 7 million?

Yeah, at least 7 million.

How does that convert? Is that like $70,000?

Once you get good at it, the value is so much more than the dollar amount. But finding the person— but the average person is not going to get good at it. So finding the intermediary that's good at it extracts some value off the top.

Even though you're incredibly wealthy, do you still, uh, so you still use airline points like crazy?

Naval destroyed me on Twitter. Like I like posted some like point hack and he's like, I thought you sold a company, ratioed the hell out of me.

Yeah, do you still credit card churn?

I don't credit card churn. I don't do things that are like high effort, but like the basics, like, oh, if I'm spending money on shit, like, yes, I'll use a credit card. Yes, I'll get points. And I still struggle, like if a flight is over $10,000, I still struggle even though mathematically you're like, oh, you can afford to spend that.

Do you still mostly buy on-sale items?

Not on sale. I like now, like, like there'd be a time where if I'd go to e-commerce and, you know, you'd get a 20% new customer discount, I'd create another account. Now I don't do that. Now I'm like, that's, that's, that's, that, that's too much effort.

You quit doing that yesterday.

Yeah.

But the credit card points, I think if you spend a bunch of money, it like just helps a ton. Also as a brown kid. It's very helpful to allow me to buy things for my parents. My parents will not accept me buying a ticket for them, but if I tell them the ticket comes from points, they have no problem accepting it.

Yeah, totally.

So it's like—

I do the same thing.

It's like weird psychology. Like, yeah, exactly. I told my sister that.

I was like, just tell her it's points.

Yeah.

And then don't bother with the points. It's going to be too confusing. Just get her the ticket. Could you tell me, I read somewhere that you've built a few things with AI to like personal software, software for your own life. What did you build? And also like, what do you see as the opportunity there?

So I was someone, again, for context, I had a computer science degree. I wrote enough code to launch the first version of Teachable, and I have not written a line of code in like 10+ years. So I understand enough, but I just felt like everything kind of went away from me. Until now with AI, where it's again become super fun to play around with stuff and build small little apps. So I started by building things that like, just like annoying workflows I have to do. Like every time we host a webinar, we have to download something from someplace, re-upload it somewhere else. Started building these sort of internal tools, but now it's reached a point where I have all these annoying— we're talking about homeownership— all these annoying things I need to do for my house. Building like a very simple sort of task management app just for myself is super useful. I think you're starting to see more and more people realize this both for their business and for themselves.

What did you make?

So for now, it's a very simple task management app where there's certain things in my house I have to do at a different cadence. Property taxes, you pay quarterly. To change the fucking water filter is once every X months. and you enter all these sort of tasks as well as in some cases, if there's another person attached to them and it kind of pulls it all automatically, it's like, oh, it's been, you know, like this month, here are the things that you should do and here are the people that can do it. And again, this is something just for my own entertainment, amusement, whatever, but you can extrapolate how any local business can do it for whatever annoying things they have to do.

Sean, whenever I hear— so Ankur's single, I think. Well, you're not. You're unmarried. Whenever I hear a single guy— sorry, that sounded like, you know, I'm not your mother. I'm not trying to diss you.

This is—

this already sounds like condescending.

No, it's not.

Dad-type statement.

Listen, listen, listen.

Dad's like, well, it's so simple for you.

No, I understand.

But go on.

No, what I'm saying is it's the opposite. What I'm saying is when I hear you describe this stuff, I think to myself, if I didn't have a wife or she just like walked out on me, I have no idea how I would handle any of this stuff. Like, I don't understand how a lot of our bills are paid. They're just kind of magically paid. And so when I have a bunch of my single friends, so like Sophia Amoruso, one of our mutual friends, she tells me about like all the time she has to spend doing all this. And I'm like, dude, I'm used to having two of us, you know, I wash, she dries. Like, I'm used to having two of us to hear— to have one person manage all of this as part of a household when you own a home. And when you have, like, responsibilities, that sounds so hard, you know what I mean? Sean, can you imagine, like, having to do this stuff? Like, everything?

I just wanted to see if you could land the plane on that one.

And I would say I landed.

Yeah, he did. He did. He did.

It was like a Southwest. Like, you know, there was a bump. There was like a little bump on the way down. But you did. You did.

What I'm saying is it's so much work.

I don't understand how people do it, especially when you add in the dynamic of homeownership. Especially as someone that grew up outside the US. So I have no actual life skills. Like, I feel like people in America, like, know how to do shit. They don't, like, they don't need a plumber. They, like, they've, like, learned it somehow. But growing up outside the country, I'm not handy. So running a house is quite tough.

Wait, is that a stereotype that Americans know how to fix toilets?

Yeah, I— you don't think it's true?

Well, I do think that amongst all of my brown friends, my brown Asian friends, all of them hate Home Depot.

Yeah, like self-reliance was not a status symbol. In the US, it is a status symbol. Like you are higher status if you can actually fix stuff. In India, it's like, oh, you have someone to do all this stuff for you.

Sam, it's not true. If you go to Home Depot on the first Saturday of every month, it'll be filled with Indian people. Do you know why?

No, what are they doing?

Because that's when they host the free Home Depot class where your kids can come build things. And it's totally free. They give you a kit and they build it. It's amazing. It's like a free educational thing. Only Indians in the store during, uh, first Saturday of the month. And it's, by the way, it's amazing. If you're not using this, you should use this.

Is that a true stereotype? Ramit has told me, he was like, my, my rich life. He like explains all this stuff and he ends it with like, and also to never step foot into a Home Depot.

Yeah. No, I mean, it definitely, at least when I first moved to America, it struck me as like strange how one, how handy everyone was. But how much pride they took in it. Growing up, it was the opposite. It was weird to like, you know, even change a light bulb. Maybe an exaggeration, but, but yeah, I definitely think being a homeowner here as someone didn't grow up here, you're not prepared for it.

That's awesome. That's funny. All right.

What— tell me about— tell me about this, like, pickleball thing that you're, you're writing about.

Oh, dude, this is— so I've— so I was like, in terms of things I spend money at after food, my second biggest expense in New York right now is a sport called padel. It's pretty crazy.

It's like— is it not?

It's not paddle, paddle, padel, whatever. Same thing, same sport.

So I want to say it right.

It depends. Like Latin America versus US, either one is fine. It's spelled P-A-D-E-L, not P-A-D-D-L-E. So paddle, padel, whatever. It's incredible. It's become in New York, it's sort of— there's a place near my office. It's like the closest we have to a country club because there's not enough space here. But you see, like, a lot of our mutual friends are there. We go there all the time to hang out. But I think it's a bigger thing than that. If you look at the Google trend for the word, we're at a point now in the US where we're super, super early. There's like 2,000 courts here and there's like 20,000 in Spain. It's on a fantastic trajectory upward. Incredibly fun sport. Demographic with a high propensity to hate.

But what's— what is the difference between this and pickleball?

It is, um, it is substantially more athletic. So a lot of people who play this are like, well, pickleball is a game, padel is a sport.

Um, it is like that. I do like a little bit of snobbery.

Pickleball is uniquely American in that, like, it's like, it's like, I don't know, it's, it's so slow compared to anyone who's actually played sports. Like, padel has a lot of, like, ex-D1 tennis players. Like, you're not exactly explaining the attributes of You're more so just assaulting them.

Is it a bigger court? Is it a bigger court or smaller paddle? Like, what's the difference?

The difference is, is that paddleball is just a bunch of fat, disgusting pigs and, uh, they're slow, they're athletic. And padel's the same thing. It's just Division I, uh, ex-athletes. Yeah.

Um, so imagine, imagine a slightly smaller yet wider tennis court with a back wall. Um, it's a, and a depressurized tennis ball. So it's quite fast because you have the back wall. So instead of hitting the ball out, it hits the back wall, bounces back, and you kind of go back and forth, was really big in Latin America and Europe, and it's finally coming to the US in a way that I think you can go to any tier 2 city, spin up a, spin up a location, and probably do quite well for the next few years. I think we're in this unique sort of arbitrage opportunity. In New York, courts are about $300 an hour and booked out over weekends. And again, New York is probably the most extremely expensive market in the US, but it kind of cascades all the way downward.

Don't you have like an app? I was with you one time and you're like, oh my God, someone just took my spot as the leader.

Oh, it's dude, it's the, it's the worst. It's the game within the game. There's a rating every game you play. And it's insane because I'm playing with people that are all in their 30s, sometimes 20s and 40s, insanely good at their professional life, but they have this like unmet competitive need. So everyone is so aggressive about their rating, about their ranking. Like, and like, a buddy of mine was texting me after we lost our match, and we're both in a really bad mood, and he's like, he's like, I don't know why I'm so upset. I'm just thinking about my life. I have a wife that loves me. I have a beautiful daughter. Why am I, why am I so angry about—

but is it like, is it like a, is it a self-reported system? How's the rating?

Yeah, so like, we all have scores. Let's say I beat you, I enter that in the system, and the algorithm is like, oh, I'm 3.9, Sam is a 2.6, but you only beat him by a little, so you actually went down despite beating him.

It's like an Elo score.

Exactly. And it's the most insane thing because you have all these people taking this way too seriously, right? Everyone has like real-life jobs and responsibilities, but people get so cranky about this.

Like, is this a social network basically that somebody's built?

So there's a company called Playtomic that's built this in Europe, and they've white-labeled it. I bet that that's also, by the way, a fantastic business. It's just I don't know how big a market it is, but this one company has a monopoly on this little paddle tennis, all these apps.

You said that New York has 1,000 courts and there's 20,000 in Spain?

In the US.

There's 1,000 only in the US and there's 20,000 in Spain?

Correct.

Wow, that's so crazy.

And again, the Google trend for the sport, like, just look it up, or I can drop a graph. It's like straight up and to the right, and picking up momentum.

So dumb question here, because squash and racquetball, almost an identical game to this. What are they just like, how mad are they that they just like sat there?

They're pretty mad. I mean, but squash, squash has been on the fringes for a while. In the US, it's like either an immigrant sport or like rich white Ivy League, like connotation. There's, there's no, there's no in between. Padel is also becoming different. It's, it's, it's, it's become, I mean, it's globally, it's growing really, really fast. And I think it's It's all a case of like catching the right timing. And it's the sort of sport where you can play the first time and can kind of play it. Like tennis, you play the first time, you're pretty terrible. It'll take you months to, you know, get okay, but you can keep playing and keep getting better. So the community that's formed around it, I think, has been awesome to see. I think, I think even Andrew Schultz was talking about it on Joe Rogan. And like, it's, it's starting to become a thing that we're still early, like people are like I don't think it's anywhere hit mainstream consciousness, but like, I don't know, it's May 12th, 2025. Come back to this in 2 years. I think it's going to be interesting.

Sean, last year I went to a— my friend held an event at the padel court and I wasn't sure padel was a sport or a brand. I didn't— I wasn't sure what it was. But when I went there, I think it was the same place, Ankur, that you go to. The whole place was all black, like black walls, like as if like Barry's or SoulCycle. It's like it had that vibe. And it was like everyone was like hot and cool and like it was definitely a scene.

Were you good?

I didn't even play. I was like at an event, but I was like watching these people and like, I got the vibe when I got like, when I got there, I was like, oh, they're like, this is like a, they're like, you know, they want to exclude people from coming here. Like, that's like the vibe that I got. Like, if I don't wear a collared shirt, they're going to kick me out. Like, that's like, that was the vibe that I got. Like I can smell the racism, you know what I mean? Uh, I— no, I try to play like real sports. I don't want to play those things. Yeah, that's a game. No, I don't, uh, I don't really like— I, I feel silly playing padel, if I'm being honest.

The one thing, the one thing I dislike about New York is it's so hard to have a content like a country club or a place you go and can have all the sports. So I do think smaller spaces like this are potentially one of the answers because I, again, I have a bunch of friends that are like dads for the first time. A lot of them don't know how to make friends as an adult dude, right? Like they're like, hey, I've moved to a new city, or I've like, I don't like my old friends. And how do I actually make friends as a man that is not dating, not drinking, not going out? What do you do? And I think places like these are the answer quite often since people come there, hang out, chill out, and some community forms around it and all that.

How do you meet friends, Sean?

No new friends, baby. No new friends. I try to keep up. I'm trying to do a good job keeping in touch with my existing friends rather than make new friends. Now, there's a lot through the school, actually. So like once your kids get into school, the priority sort of shifts to like, well, I'm gonna be around these people anyways, let me just find the coolest people of this group because I'm gonna— I already have like 3 things a month that I have to do with, you know, this, this set of people. So is there anyone here who I get along with? And then secondly, if I can, then I get the double win because I get the playdates for my kids while I get to hang with somebody cool. So that, that became like the focus for me, uh, rather than like you know, going and individually making a friend. And then, you know, I got 3 little kids under 5 years old. Like, if I'm gonna go do a hangout with my friends, that's pretty— that's a pretty hard— like, that's just like a choice that's only benefiting me. It doesn't really benefit, like, the whole— it doesn't integrate with the rest of my life. But I do— I do play in a basketball league that I treat, like, uber seriously like this. Um, our friend Ruben runs a basketball league called SF Hoops. He's been doing it for, like, a decade. And, um, we play one game a week and you would think like, oh, it's just like this rec ball, who cares? Pick-up basketball, basically. But no, like, I take it so seriously. Like, basically the 6 other days of the week are just preparation for the one big game night. And then after that, you know, we come home and I basically get the footage off the AI camera and then I start sending clips to the team and I'm like, hey, like, you know, partially funny, like, You know, just commentary, but also like, yo, we got to correct this for next week.

We're not going to—

we can't do this again. And so we take it very, very, very seriously.

It's exactly the same in our groups because it's a 2-on-2 sport. People are sending coaching videos back and forth and the whole thing, whole thing is pretty insane.

You bought a piece of a cricket team?

I bought a piece of a cricket team.

What's the story here?

So again, flashback, I don't know, age 8 to 14, cricket was the only thing I cared about. I wanted to play professionally. I played internationally for the country I grew up in. It was sort of my first love. And I think we've all felt this where the older you get, the more you're like, I want to do what like the 8 or 9-year-old version of me thought was dope. And then I got in touch with someone who said one of the shareholders in what is the most valuable cricket team in the world, they're like worth roughly about $1 billion in the Indian league, was selling a stake. And I was like, this is the whole point of having money, right? To be able to do things like this. So I ran, so I put in a bunch of dollars myself, also put together dollars from other investors. We now own a small piece of the team, but in time, the idea is can keep buying a bigger and bigger piece since I joke about this a lot, but like, you gotta be like the non-douchey Chamath. The douche part is uncertain for now.

No, I'm just kidding.

Yeah.

So which team is it? And you like ballpark, are we talking like 6 figures, 7 figures, 8 figures? How much did you put in?

Um, I put, yeah, so I put in 7, 7, the, the group we represent put in high 7 figures of which I think I was 20% was my, my, my own dollars. Um, the comp, the valuation of the team was close to $1 billion. So as a percentage, it's still, still tiny. The team is called Chennai Super Kings. They're— they've won like, I want to say, 6 championships. The Indian League is about 15 years old, so they've won more titles than any other team, highest market cap. And dude, it's such a monopoly because India is the biggest country in the world and it's truly a one-sport country. Like, the delta between sport number 1 and sport number 2 is massive. And as far as the league goes, they just have so much room to run since it's still not that many teams. The market is maturing really fast. It already is the third richest league in the world. There's— I think it's also a fantastic investment where, like, it's not going to generate tech startup returns, but it's not— it's unlikely to lose money. Like, there's such a long way the sport has to run.

You said it's the third most valuable league in the world.

Yeah, it's after— it's by TV rights per game. It's actually number two after NFL. And like by total revenue, it's more than any of the European soccer leagues, for instance, which is crazy for a league that is worth more than the Premier League. How is this possible?

How could the most valuable team be $1 billion, but the league be worth more than like— there's like players in soccer that can almost make $1 billion.

Well, I'll quote my source after this, but it is the— whatever source had it, the league being worth more than the European leagues, which I found crazy. And my interpretation was the European leagues are just very bad at monetizing their commercial value. Like maybe the value in the league is to the team. So while Manchester United may be worth substantially more, the franchise value on the EPL may not be that much. That was my—

Gotcha.

Have you flown there and like participated in any of the—

I haven't had a chance to, because this deal came together very recently. So I haven't done it yet. And long-term, that's what I actually want. Like everyone's like, oh, wouldn't it be cool to like earn the upside? No, I want to draft players. I want to be able to to kick people out. Like, like to me, long-term, when I have time, that is the more fun part of this whole thing. Like, sure, don't lose money. But being an annoying, overly involved owner, I think sounds awesome. I don't know if you did you, did you guys read about, do you guys read about this VC dude in Europe who like bought a soccer team and then he put himself in the team?

Yeah, no, but that's awesome. Who is that?

He's like a player on the team.

And it's so funny because 80, 90% of the world are like, oh, that's pathetic. I also was like, that's awesome. I would totally do it.

Did you guys see, did you guys watch the Netflix show or something? I forget what it was on where Ryan Reynolds and, uh, Rexxon.

Yeah, I didn't watch the show, but yeah, I read a lot about it.

How has it turned out, Sean? Do you know? That's been like 4 years. Has it?

I think it's going well. They got promoted. Um, I think a couple of times actually, I think they've moved up a couple of times. We had a guy on the podcast, Haralobob, who did the same thing. He's bought a team in the— that's like, I don't know, third division team or whatever. I don't know which division they're in exactly, but they're, you know, up for basically promotion. And he's like bringing like Moneyball, which is— he's, he's basically like a kind of data guy and he's a sports bettor. That's his background. And so he's bringing like a Moneyball sort of approach to like drafting the right players and— or not drafting, but like, you know, signing the right players, playing the right strategy, and selling at the right times on players.

Did you see the Celtics sold for $6.1 billion? So that basically changed everyone's model, right? Because people were underwriting sports teams being worth 1 and then 2 and then maybe 2.5, 3. They sold for 6. It's kind of put into question just how much the rest of these teams can be worth.

So who do they sell to?

Can I— was it some PE group?

Yeah.

It doesn't seem— it just seems that the sports teams are just, uh, It, it seems challenging. It seems like a very challenging thing as of— I mean, I'm a little plebe nobody, but it seems like challenging to have a proper market for it because it seems like one of those things that if you want it, you want it.

Do you know what I mean?

And the only—

it's like a domain name. Like, it's very hard to be like, this domain is worth $400,000. There's such few supply and demand is both like very, very limited.

There's 3 potential buyers and whoever wants it, it will potentially pay. Like if Jeff Bezos wants a sports team that he grew up with, He will almost pay an unlimited amount of money and it doesn't have to make sense. And that sets the market price for the next—

well, the number of billionaires keeps going up. The number of teams in the NBA is the same.

Yeah, it's finite.

They're about to launch— they're about to open up two new franchises and each one of those will get $6 billion. And then that revenue goes to the other owners.

And that's like two— two new franchises. Wait, what?

Like the NBA is going to expand two more teams. They're going to do like a Vegas team and they're going to do probably a Seattle team. And they wanted the Celtics franchise to sell at a very high price point so that they could then go to those new franchises and say, you're also a $5 to $6 billion price tag, which is pretty crazy. I mean, like, you know, when Mark Cuban bought the Mavs, I think he bought them for like $200-something million, right? Like, uh, the original Celtics just sold for $6 billion or whatever. He bought it originally for, uh, I'd have to look it up, but it was like very low. It was basically like he compounded kind of like 20% over, you know, a 25-year period, something like that. And so he, you know, he did really, really well on that investment, won the championship last year, and then sold to this guy who had previously started a, or was a partner at this big PE shop. Um, and that guy was a lifelong Celtics fan. And same thing, like, you know, this is, it's a trophy asset that also has like all these other interesting things, which is like the media rights and other, other things that are—

there's the title that's in the US. You also get massive tax write-offs, like there's all kinds of weird tax stuff where like some people have taken player contracts as a depreciating asset and use that depreciation to offset income. So crazy.

And there's like a real estate play. So like basically some of the teams buy their own state, they own their own stadium, so they actually own the real estate and then they buy the existing, the real estate right around the stadium because they're the hub. And so they know that that real estate right around it's going to be really worthwhile. Some people are trying to open up casinos because now sports betting is legal, which is like this whole other vector of like how to generate revenue. So you have all these. And then, by the way, your expenses are capped. There's a salary cap, like in the NBA, for example. So like you can only pay so much, but you can still earn, you know, you can still earn more and your franchise can go up in value.

We, I went and heard a talk by Mark Lasry. Do you guys know who that is? He, I think he owns the Bucks. And he was telling a story. He was like, he, his whole, he's a billionaire and his whole thing is buying sports teams now. And he's like, there's basically two ways to run a sports league or a sports team. The first way is you run it profitably, and if you run it profitably, you will lose. Your, your team will lose, or you run it in such a way where you lose $200 million a year and you win championships, and then you hope that you can sell it for enough money that it works out. So he's like, you either want to win and you got to have a lot of extra cash flow to cover this nut, or you're going to lose, but you'll be profitable. You pick one or two.

I bet it also depends on the sort of sports. Again, that was the whole Moneyball approach, right, back in the day or whatever, where like you're spending a lot less but relatively speaking you're doing well. Um, I think for a lot of people, it's— at least for me, all of— a lot of people who do this had at some point failed athletic ambitions. And there's a few ways those can manifest. Either you can make your, your kid play a bunch of sports, or you can buy a sports team and still feel like you're doing the same thing.

Well, we talked to a guy, uh, I don't believe the guy—

everything is true. Like, the Warriors win, the Warriors generate more revenue than anybody in the NBA, they're worth $9 billion now. Like, they did all of the above. So I don't think that's necessarily true.

Revenue or profit?

They're also profitable.

Well, it may be true in Milwaukee.

Yeah, exactly. Yeah, I think in small markets that actually might be true.

Maybe.

And we were with, uh, we were with, um, Alexis, um, at the basketball thing, Sean, and he was telling us about how he bought the women's soccer team. No, he bought the women's soccer team. He's starting a track league. He invested in that. He also told us about how he was either— he either did buy or he was trying to buy a piece or a team in Tiger Woods' new golf league. Or, you know, they have this weird, like, stadium golf league, which sounds pretty awesome. And he was— and he was like, well, the numbers sound crazy. I don't remember what he said, but let's say hypothetically it was $20 million. He's like, that sounds ridiculous, but let me explain the math. Like, this sport gets this amount of views and they make this much money. This sport gets this amount of views, they make this much money. Therefore— and he backed into it and it sounded— it made incredibly high numbers on the surface seem incredibly reasonable. I heard another guy do the same thing with sailing. This guy, Mark Lazar, he was like, I'm trying to buy a sailing league. And he was like explaining the numbers and basically the whole business of the sports stuff was basically finding undervalued media rights and figuring out whose contract is going to end soon. And I want to purchase them and renegotiate the contracts in such a way where I get value.

Yep. And the US is so good at this. Like, back to the European leagues. Yes, some of them are massive teams, but I bet if you look at the numbers and how well they monetize eyeballs, it's terrible. Like, in the US, you have very small leagues that are so good at, like, squeezing out every last dollar. Like the NFL obviously is like a world-class case study where they've monetized so well that they're literally hitting a point where they're like, we need to go outside the US to like meaningfully still grow from this point.

That, that's insane. Um, Ankur, awesome hanging out with you, dude.

Yeah, it's great.

Great.

Thanks for having me.

Where do people find you?

So we're hosting a big conference for people who are seeing this. Sponsored by a lot of people at HubSpot and The Hustle, called the OOO Summit. It's this Friday. So we'll be seeing a bunch of people there. Otherwise, I'm active on social media. My Twitter is my name. And our, for any tax optimization stuff, kerry.com. All right, we appreciate you.

That's it, that's the pod.